China delays resource tax hike for miners

China will hold off for at least three months on a resource tax hike due to inflation worries.

(CCTV 07-09-2008 14:12)--China will hold off for at least three months on a resource tax hike due to inflation worries. The move came after rumors of an imminent rise led to coal-related share prices tumbling. The official Shanghai Securities News quoted a government source as saying, a plan to reform the resource tax system has been submitted to the State Council.

But it was not approved. Shanghai-listed coal stocks rose after the report. A rumor last Friday said resource tax changes would be announced over the weekend. It also said authorities were considering levying the resource tax on a price basis rather than on a volume basis.

And the tax rate will stand as high as 10 percent, exceeding the market anticipated 3 to 5 percent. Analysts say the resulting tax increase will further boost domestic coal prices, which have recently surged to record highs due to tight supplies.